Wedbush reiterated its Outperform rating for International Business Machines Corporation, increasing its price target from $325 to $340 based on robust GenAI demand and stable consulting bookings. The firm’s analysts cited IBM’s projected 5% revenue growth in 2026, despite an $11 billion acquisition of Confluent completed last quarter. While Red Hat revenue growth has decelerated, the new acquisition is expected to deepen IBM’s data streaming capabilities. Wedbush highlighted that IBM’s consulting arm, which contributes to a $12.5 billion GenAI order book, remains a key revenue driver even as consulting grew only 1% year-over-year in Q4.

In the fourth quarter, IBM reported revenue of $19.69 billion, up 12.1% year-over-year and above the $19.22 billion consensus. Software sales rose 14%, with hybrid cloud and automation products leading growth, while infrastructure revenue jumped 21% driven by 67% growth in mainframe systems. Adjusted earnings per share reached $4.52, surpassing analyst forecasts of $4.30. The strong performance propelled a 9% increase in IBM’s share price in after-hours trading, reflecting investor confidence in the company’s AI and hybrid cloud strategy.

IBM generated $14.7 billion in free cash flow over the full year 2025, up $2 billion from the prior year, and reported net cash from operating activities of $13.2 billion. The company ended the quarter with $14.5 billion in cash and marketable securities against $61.3 billion of total debt. In its January board meeting, IBM approved a $1.68 per share quarterly dividend, marking the company’s 100th consecutive year of dividend payments. Management reaffirmed guidance for more than $1 billion of additional free cash flow in 2026, underscoring its commitment to capital returns and productivity improvements.